Salary reviews for employees receiving shift allowance

Here’s some important information you need to know when it’s time to complete a salary review for a shift worker

Completing a birthday review for a shift worker is similar to completing a birthday review for any other employee. However you will need to take into account additional information and complete a few more steps.

When completing the birthday review you need to examine each pay period between your employee’s current and last birthday. You will need to determine whether they have qualified to receive shift allowance on each pay day, and if so, what the salary should be for each pay period.

Remember that individuals whose period of membership is less than 12 months at the time of the review cannot have shift allowance included in their super salary. In these cases complete the birthday review as though they weren’t being paid shift allowance. Find out more on our Salary Maintenance page.

Salary reductions

You may find that there are a number of reductions between your employee’s last birthday review and the current review. This is because the amount of shift allowance paid and the eligibility to have shift allowance paid tends to vary from pay period to pay period.

Employees who receive shift allowance can have a salary reduction when:

  • The result of the salary calculation (A x B or C + D) is lower on one pay day than it was on the previous pay day, or
  • Your employee does not meet the eligibility criteria on one pay day even though they had met the criteria previously.

This is in addition to other causes of salary reductions such as the loss of another recognised allowance or a reduction in your employee’s basic salary.

The way that you treat these salary reductions will depend on the scheme your employee belongs to.

For PSS and PSSap

You don’t need to perform a salary maintenance calculation for every reduction. Instead you should look to the dates that Average Weekly Ordinary Time Earnings (AWOTE) rates were published since your employee’s last birthday. You will need to find the highest salary that the employee was receiving immediately before a reduction between each AWOTE publication date (known as an AWOTE period), and perform a salary maintenance calculation on that reduction using the AWOTE calculator.

Once you have completed the salary maintenance calculation for the highest pre-reduction salary in each AWOTE period between the employee’s last and current birthday, compare these calculations with your employee’s salary on the current birthday and on their last birthday.

Whichever is the highest amount will become their super salary until the next review.

For CSS

You only need to do a salary maintenance calculation if the employee’s salary at the date of review is lower than the highest salary since their last birthday. If the salary is lower, complete the review the same way that you would for a PSS or PSSap member (see above).

·Completing a salary review

Step 1: Find the right information

The first step is to note down the following information from your pay system.

(Annual) Salary and recognised allowances.

You will need information about your employee’s annual salary and entitlements to any allowances at the end of each pay period since the last salary review.

Amount of shift allowance paid

This is the amount of shift allowance that your employee was entitled to be paid for work performed in the pay period. If shift allowance is paid with a delay in your organisation you will need to pay careful attention to the employee’s roster to ensure that you are calculating based on the dates that the work was performed, rather than the dates that the allowance was paid.

If your employee was paid shift allowance at different rates through the year, you will also need the number of hours that attracted shift allowance payments during the pay period.

12 month period start date

This is the date 12 months before that day that you are looking at. Don’t forget to consider any disregarded periods of leave and how that may impact the 12 month period – refer to page 2 of this guide for more information.

Step 2: Determine your employee's eligibility

Shift allowance should only be included in your employee’s super salary where it has been payable for 75% of the included pay periods between the start of the 12 month period and the end of the pay period being examined.

If this test has not been met, the super salary will be your employee’s annual salary and recognised allowances at the time. Shift allowance cannot be included.

Step 3: Calculate salary components

Super salary is the lowest of A x B and C + D. Please refer to the super salary calculation section of this guide for more information.

Step 4: Calculate the super salary for each pay period

Determine the employee’s super salary for each pay period.

The order of determinations that you need to make for each pay period is:

1. Was the employee’s period of membership greater than 12 months prior to the end date of the pay period in question?

  • If NO, the employee’s super salary will be the sum of their annual basic salary plus any recognised allowances;
  • If YES, proceed to the next step

2. Was the employee entitled to receive shift allowance in 75% of the pay periods during the eligibility period?

  • If NO, the employee’s super salary will be the sum of their annual basic salary plus any recognised allowances;
  • If YES, proceed to the next step

3. Was the result of A x B lower than the result of C + D?

  • If YES, the employee’s super salary is the result of A x B;
  • If NO, the employee’s super salary is the result of C + D

Step 5: Completing the salary review

Identify your employee’s super salary for each pay period between their last birthday and the current review date.

Take note of each reduction point – any point in time where there has been a reduction in your employee’s super salary. You may find that there are a number of reductions between the last birthday review and the current review. You will need to perform a salary maintenance calculation for the reduction point with the highest pre-reduction salary in each AWOTE period.

You don’t need to perform a salary maintenance calculation for every reduction. Refer to the Salary Reductions section above for more information.

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